|Oracle Financials for India User Guide|
Part Number E13658-03
The Inclusive Tax feature is applicable to all modules of Oracle Financials for India.
In some business scenarios the purchase price is inclusive of all taxes or some taxes, Oracle Financials for India supports both scenarios. This means that the transaction price on documents such as purchase or sales orders is inclusive of all taxes applicable to the transaction.
The Inclusive tax feature of Oracle Financials for India supports tax inclusive computations in the 'Order to Cash' and 'Procure to Pay' cycles.
You can define a tax as inclusive in the tax code definition and attach this code as a part of tax categories. For transactions having these tax codes, the tax amounts are back calculated and reflected on the respective transaction. This enables correct computing, tracking, and accounting of inclusive taxes for financial and statutory reporting.
To use the Inclusive tax feature, you must:
Set Account Inclusive Tax to Yes on the TDS Period window.
This one time setup of Account inclusive taxes determines whether transfer inclusive tax accounting into GL separately or not.
Some additional accounting entries are passed into GL interface tables directly if Account inclusive taxes option is set to Yes.
Tax Definition Window
This window is used to define new taxes. This window shows details such as tax name, tax type , tax rate, credit percentage, and vendor information. In this window, a new check box, Inclusive Tax Flag, is introduced. This check box is editable only for new tax codes. For existing tax codes, this check box would be read only.
Note: Inclusive taxes cannot be created until the setup to account inclusive taxes is completed in the TDS Years window.
Inclusive Tax Option on Various Windows and Reports
The following windows include inclusive tax field:
Service Tax Repository
RG23 D Register Entries
Note: Inclusive taxes also impacts Project Costing and Inventory Item Costing. All inclusive taxes are automatically considered for costing by the base costing program because they are part of the item price. If there are any inclusive taxes which are of recoverable in nature, the costing gets updated correctly by inserting a negative line.
The inclusive tax details are shown in the following India Localization reports:
India - Total Sales report in Receivables displays the sum of non inclusive tax of AR transactions.
India - Commercial Invoice for AR report in Receivables displays the non inclusive taxes of AR transactions in detail.
India - Excise/VAT Invoice Template: report in Order Management displays the non inclusive taxes of Sales Orders in detail.
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